Manheim Consulting Blog

Helping customers accelerate their business performance

Since 2005, Manheim Consulting has conducted research and performance studies for the company’s largest dealer and commercial clients, while providing a broader perspective on the industry at large for those who follow the automotive sector. Our team leverages our industry-leading data set to illuminate new remarketing trends, optimize location or sales channel utilization, benchmark client performance against peers, publish studies on leading practices, and bring macroeconomic trends into remarketing context.

Manheim Used Vehicle Value Index

Wholesale Prices Rise Slightly in June

Wholesale used vehicle prices inched up in June after declining in each of the previous four months. Current wholesale pricing is now in line with historic norms and market fundamentals; but a further acceleration in wholesale supplies, plus strong seasonal headwinds, will likely put downward pressure on pricing.

Used Car Market Report

The Manheim annual Used Car Market report examines the economic underpinnings of the entire used vehicle market and sector-specific trends that influence the supply and pricing of used vehicles.

This report highlights market conditions and buyer and seller strategies within the used vehicle marketplace, provides an update on digital and mobile technology developments. It also includes an annual look at the various industry components, including dealer, rental, repossessions, leasing, and salvage.

Impact of Delayed Titles at Auction

Roughly 35% of all vehicles at auction are sold without the physical presence of a title. When broken out by seller type, over 90% of all commercial sales are conducted with a title, while only 42.3% of dealer sales are. The seller must announce lack of title as the car runs down the lane, or on the online posting, so the buyer’s awareness of the absence may affect the sale and auction performance. This study found that conversion rate more than doubles when the physical title is present.

Manheim Consulting Blog

Publications

Manheim Consulting clients have improved their remarketing performance by challenging our analytical staff. Read the conclusions of just a few of these in-depth studies.

Auto Industry Brief

July 2015 Auto Industry Brief The fundamentals of labor market and credit conditions should remain favorable to auto retailing for some time. Wholesale automotive markets continued to enjoy growing volumes and stable pricing in the second quarter. Retail markets had higher volumes on narrower margins. F&I income and greater operating efficiencies kept profits at record highs.

June 2015New and used vehicle retail markets continue to perform solidly. On the new vehicle side, volumes are up and pricing is strong, and the used vehicle market has also seen continued growth and profitable sales.

May 2015
Either the pace of economic activity will accelerate, or we will backslide into a quagmire. The consensus forecast – continued slow, subpar growth – seems the least likely scenario. So yes, when it comes to the over / under bet, I’m going to take both.

March 2015
[W]e find our economic outlook scarily close to the consensus view, but believe there is an unhealthy disregard for the downside risks.

February 2015
Simple momentum should be enough to keep the economic backdrop favorable in the near term.

Garff Auto Group's Dealer Trade Network
Garff wanted to ensure that the right vehicles were at the right dealerships so that more vehicles were sold at retail vs. sending aged inventory straight to the wholesale environment.

Presentations

Tom Webb is a frequent speaker at automotive and economic conferences. His PowerPoint presentations enable the reader to understand the impact of macro trends on the vehicle markets. Please visit this website periodically to view Tom's latest presentations.

Rental Detail ROI
Manheim Consulting determined the ROI on varying levels of detail service: no detail, wash and vac, and full detail.

Effects of Color on MMR Retention
This study examines if color impacts auction results, which is important to rental and other fleet consignors as these companies have a degree of control over their inventory.

Quarterly Conference Call

Next Conference CallJul 8 at 11am ET

You are invited to join Tom Webb, chief economist for Manheim and the compiler of the Index, as he discusses the major economic and industry trends that have shaped the quarter. Tom will also take your questions following the presentation.

Manheim Consulting Blog

Manheim Used Vehicle Value Index

By applying statistical analysis to its database of more than 5 million used vehicle transactions annually, Manheim has developed a measurement of used vehicle prices that is independent of underlying shifts in the characteristics of vehicles being sold.

The Manheim Index is increasingly recognized by both financial and economic analysts as the premier indicator of pricing trends in the used vehicle market, but should not be considered indicative or predictive of any individual remarketer's results.

Wholesale Prices Rise Slightly in June

Wholesale used vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) inched up in June after declining in each of the previous four months. This brought the Manheim Used Vehicle Value Index to a reading of 123.9 in June, which represented a decline of 0.1% from a year ago.

After peaking in 2011, wholesale prices remained strong and have moved in a narrow range ever since, despite ever-growing wholesale supplies. The pricing strength is a testament to solid retail markets, greater operating efficiencies, and good remarketing practices. Current wholesale pricing is now in line with historic norms and market fundamentals; but a further acceleration in wholesale supplies plus strong seasonal headwinds will likely put downward pressure on pricing.

New vehicle sales strong, transaction prices up. New cars and light-duty trucks sold at a seasonally adjusted annual rate (SAAR) of 17.1 million in June, down from a 17.7 million pace in May (a month that was boosted by several calendar quirks). Simply eliminating the questionable selling day adjustment would put the sales pace for both months on par with each other.

The SAAR on a three-month moving average basis was 17.1 million in June, the strongest pace in nearly a decade. Both incentive spending and inventory levels remain restrained. Indeed, in June, there were more cases of sales’ being lost due to restricted supplies than sales’ being artificially boosted by manufacturer channel stuffing.

The average new vehicle transaction price was $33,340 in June, according to Kelley Blue Book. That was up 2.5% from a year ago. The rise was the result of model mix shifts, higher trim levels, and straight price increases. The government’s new vehicle component of the Consumer Price Index, which controls for mix and adjusts for quality increases, has risen 0.8% over the past year and 2.4% over the past three years. Given that the Manheim Index has eased over this time, the ratio between the two series has now returned to its normal range.

Used vehicle retail market remains solid. Total used vehicle retail sales rose in both April and May, after being down in the first quarter, according to NADA. CPO sales continued their record pace, with sales up 17.6% in June and 12.5% for the first half of the year. And, CarMax reported that same-store used unit volumes were up 4.9% for its fiscal quarter ending May 31. Analysts expect the new car dealership groups to show strong used vehicle operations when they report second-quarter results later this month.

Rental risk: Older, rougher vehicles push down prices. A straight average of auction prices for rental risk units declined 14.2% between March and June. After adjusting for broad shifts in market class and mileage, the decline was a more modest, but still significant, 6.5%. Much of the weakness was the result of older and rougher-condition vehicles’ being sold. For example, in the second quarter of 2014, 62% of the rental risk units sold were from one model year past and 23% were from two model years past. But, in the second quarter of 2015, only 31% of sales were from one model year past and 55% were from two model years past. Likewise, in the second quarter of 2014, 45% of the risk units sold at auction had a condition grade of 4.0 or better. In the second quarter of 2015, only 30% did.

Auction volumes for rental risk units were up significantly in June and for the first half of the year. Meanwhile, the number of new units sold into rental declined 6% in June (due to a significant reduction in GM deliveries), but were up 6.5% year-to-date.

Many dealers will no doubt like the near $2,000 reduction in the average auction price for a rental risk over the past two months, as it will allow them to greatly expand the customer base that they can get into a late-model used vehicle. But, of course, dealers will be successful only if they can complete the additional reconditioning work quickly and cost-effectively.

Market segment and price tier trends. Pickups and vans were the only two major segments with higher prices year-over-year. Within the van segment, full-size commercial passenger units and cargo vans were especially strong.

Within the pricing tiers, as has been the case all year, there was weakness in the $9,000 to $11,000 range and strength in everything above $15,000. The volume of vehicles offered in the $9,000 to $11,000 range was up considerably from a year ago.

A straight average of auction pricing was up year-over-year for both commercially consigned and dealer-consigned units. The average mileage for dealer-consigned has stayed close to its year-ago level. The average mileage on commercially consigned units has declined.

Index Release Dates

Manheim Consulting releases the latest update of its Used Vehicle Value Index on the fifth business day of each month. To receive a monthly reminder about this update, as well as reminders for Tom Webb's quarterly conference calls, please email manheimindex@ketchum.com.

Manheim Consulting Blog

Used Car Market Report

The Manheim annual Used Car Market report examines the economic underpinnings of the entire used vehicle market and sector-specific trends that influence the supply and pricing of used vehicles.

This report highlights market conditions and buyer and seller strategies within the used vehicle marketplace, provides an update on digital and mobile technology developments. It also includes an annual look at the various industry components, including dealer, rental, repossessions, leasing, and salvage.

Where to Find Us

Services

Manheim Consulting: Your Partner for Remarketing Services

Manheim Consulting is dedicated to helping our Commercial and Dealer customer improve their remarketing performance. Our team accesses the extensive database represented by the more than 10 million vehicles posted annually online or run in Manheim auction lanes. We apply data mining, targeted research, competitive benchmarking, and quantitative analyses to provide our clients with unbiased reporting and strategic advice.

Powered by Professionals

Manheim Consulting is built on the knowledge and experience of its team of consultants. Over the years, Manheim Consulting has established itself as a trusted advisor to the automotive industry. Professionals from a diverse set of backgrounds help develop a perspective that is truly unparalleled in the industry.

Our Team

Tom WebbChief Economist

Tom Webb joined Manheim as chief economist in 2001, bringing to the position his unique understanding of the automotive retail and wholesale industries. As the chief economist for the National Automobile Dealers Association for 26 years, Tom was already recognized for his authoritative research and commentary on economic trends and their impact on vehicle demand. At Manheim, Tom continues in his role as commentator on the economy and vehicle markets and is a frequent guest at Manheim client and automotive events, in the media and as a contributor to automotive and remarketing publications.

Tom has a degree in Economics from the University of Wyoming and did graduate work in Economics at Georgetown University.

Nancy HillSenior Manager, Customer Consulting

Nancy Hill joined Manheim Consulting in 2006 and has over 13 years’ experience in the automotive remarketing industry. Her experience includes consulting with customers in the bank, rental, captive finance, dealer and commercial fleet segments, leading initiatives to help improve remarketing strategies. Key projects include recon ROI analysis, footprint optimization, and optimal location recommendations. Additionally, Nancy authored several studies, covering topics such as location/sale day consolidation, rental detail ROI, and understanding which vehicles have the highest success rates in online sales.

Nancy has a Bachelor of Arts from the University of Georgia and an MBA from Mercer University.

John RadcliffeSenior Manager, Customer Consulting

John Radcliffe joined Manheim Consulting in 2009 and has over 15 years of automotive industry experience. John currently helps large dealer groups become more efficient in the remarketing industry by providing custom analytics, peer benchmarking, ROI analysis, market research, and industry trends. Prior to joining Manheim, John worked for Chevy Chase Bank as a senior loan officer specializing in retail and commercial lending in the automotive industry.

John holds a Bachelor of Arts in Accounting from the University of West Florida and an MBA from Keller School of Management in Chicago.